CFTC Charges Opyn, ZeroEx, and Deridex — Are DeFi Activities Illegal?

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  • CFTC takes enforcement actions against three DeFi protocols: Opyn, ZeroEx, and Deridex.
  • Accusations include offering leveraged and margined retail commodity transactions in digital assets.
  • Securities lawyer Gabriel Shapiro advises DeFi operators to block the U.S. due to CFTC’s regulatory stance.

The Commodity Futures Trading Commission (CFTC) recently took enforcement actions against Opyn, ZeroEx, and Deridex, sending a stern message to the decentralized finance (DeFi) community.

Opyn, Inc., headquartered in California, ZeroEx, Inc. of California, and Deridex, Inc. based in North Carolina, all Delaware-registered entities, were all accused of offering leveraged and margined retail commodity transactions in digital assets. Furthermore, Deridex and Opyn face additional charges for failure to register with the CFTC and adopt customer identification programs.

According to an official statement released on September 7, these activities were conducted within the realm of blockchain-based software protocols and smart contracts, which operate under the DeFi umbrella.

The CFTC’s orders require the three DeFi protocols to pay civil monetary penalties. Opyn faces a fine of $250,000, ZeroEx $200,000, and Deridex $100,000. Additionally, all three companies are directed to cease and desist from violating the Commodity Exchange Act (CEA) and CFTC regulations.

While DeFi has gained popularity as a decentralized trading space, the CFTC’s message is crystal clear: DeFi doesn’t exempt you from regulatory rules. CFTC’s Director of Enforcement, Ian McGinley, minced no words when he said:

Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts. They do not.

McGinley stressed that the Enforcement Division will remain vigilant in the rapidly evolving DeFi landscape and will “aggressively pursue those who operate unregistered platforms that allow U.S. persons to trade digital asset derivatives.”

Gabriel Shapiro, a prominent securities lawyer, cautioned DeFi operators, saying, “if you run any kind of interface, etc., for a DeFi credit protocol, block the U.S.” He emphasized that many had doubted his previous assertion that the CFTC’s case against Ooki DAO simply makes DeFi illegal under the CFTC’s view of U.S. law. Recent developments, he argued, have vindicated his concerns.

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